The auction house wars have opened a new front as Christie’s faces a $40m lawsuit from Heritage for hiring away its three-person handbag team led by prodigy Matthew Rubringer, the NY Daily News reports:
“Christie’s locked up the whole management team,” Heritage complains in papers filed in Manhattan Supreme Court.
The Texas-based company said that since Matthew Rubinger, Rachel Koffsky and Caitlin Donovan “had no prior experience in the auction field” before Heritage hired and trained them, “they cannot perform their duties for Christie’s without using Heritage’s confidential information.”
The New York Times explains the path Rubinger took to Heritage and the reason handbags have become such a strong business:
For Heritage, the flourishing designer handbag market has produced record sales and big profits. At a Heritage auction in late 2011, a brilliant red crocodile Hermès Birkin, with 18-karat white-gold and diamond-encrusted hardware, sold for a record $203,000. Last December, a one-of-a-kind Hermès Kelly bag, in porosus crocodile and black Togo leather, with geranium-colored feet, went for $125,000.
Hermès International has ensured demand by limiting production at its atelier in the Pantin suburb northeast of Paris. […] Heritage executives say that while Hermès frowns on reselling its handbags, Hermès has directed buyers to Heritage’s door.
“Our buyers tend to seek immediate gratification,” said Kathleen Guzman, a managing director of Heritage’s offices in New York. The high-end handbags are sought by collectors and even investors, say Heritage executives, who estimate the average buyer has a net worth of $12 million.
“If you buy one Hermès bag for $20,000, depending on the popularity, the skin, the color, the size, you can resell it down the road for an average of 60 percent to 150 percent of what you paid for it,” Gregory Rohan, the president of Heritage, said in a phone interview Thursday from Paris.
Four years ago, the luxury accessories category did not even exist. Then Mr. Rohan met Mr. Rubinger, a recent graduate of Vanderbilt University. In high school, Mr. Rubinger started buying and reselling inexpensive purses. Later, he moved into designer bags for sale on eBay, with his bedroom as operations center.
“To make more, to scale what I was doing, I had to move up in price point,” Mr. Rubinger recalled in an interview this spring at Heritage’s offices in New York.